South Korea’s Coinone exchange denies Coinbase takeover talks

Coinone, a South Korean crypto exchange, says there is no truth in reports it will meet Coinbase executives to discuss a takeover this week, after reports that the US exchange was eyeing an acquisition deal.

Coinbase executives tabled a meeting with Coinone after the latter’s CEO Cha Myung-hoon indicated a willingness to sell his controlling 54% stake in the exchange, sources told Seoul Kyungjae, a major South Korean newspaper, on Sunday.

“These reports are untrue,” said a Coinone spokesperson, as reported by South Korean media outlet Token Post. “We have no direct meeting with Coinbase planned.”

On Sunday, Coinbase told DL News that it would not comment on “speculation or rumours.”

With the South Korean crypto sector going through a rocky period, with investors opting for stocks over coins, the fate of the country’s crypto exchanges has fallen into the spotlight.

Coinone’s closest rivals Upbit, Korbit, and GOPAX have all been the subject of recent takeover and merger talks in recent months.

CEO returns

Coinone has also announced the return of Cha to the position of CEO, five months after stepping down from the post, South Korean publication Bridge Kyungjae reported. The exchange confirmed it was looking into “strategic investment and other forms of business collaboration,” but said “nothing has yet been decided.”

Coinone’s trading volumes trail far behind Upbit and Bithumb, and represent just 5% of the domestic market.

The unnamed sources, quoted by the newspaper Seoul Kyungjae, linked Cha’s return to forthcoming “equity investment” from overseas players interested in entering the South Korean market. But Coinone said it was instead reshuffling its executive staff as part of a search for new business opportunities.

“Interest in the crypto industry is at an all-time high,” the Coinone official said. “As such, we are receiving an increasing number of requests for various forms of cooperation. We are currently reviewing several options.”

Investors look elsewhere

Despite Coinone’s bullish statement on the health of the South Korean crypto scene, the evidence suggests otherwise.

The number of monthly active users on Coinone, Upbit, Korbit, Bithumb, and GOPAX’s apps fell by over 14% between January and December last year, data provider IGA Works reported.

The number of new app downloads for all five exchanges nearly halved in the same time period. By contrast, South Korean mobile users have doubled their activity on stock trading platforms.

“The stock market’s appeal has increased due to a rise in earnings and policy expectations,” an unnamed securities industry source told Hanguk Kyungjae. “But the crypto market lacks factors that drive new capital inflows. This difference in sentiment is quite apparent in the trading data.”

Tim Alper is a News Correspondent at DL News. Got a tip? Email him at tdalper@dlnews.com.